Acquiring Minds Holdco Origin Story: The Bumpy Road to $3m EBITDA
May 9, 2024
Experienced entrepreneur Chandra Rao discusses challenges with dishonest sellers, financial struggles, navigating payment terms, and partnering issues. He shares insights on due diligence mistakes, embezzlement, conventional loans vs. SBA, and exponential business growth in electrical contracting and fiber cabling. Rao reflects on juggling a roll-up, dealing with fraud, and the complexities of acquisitions and financing in the construction industry.
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First Acquisition
- Chandra Rao's first acquisition was a small SaaS business bought for $60,000 using credit card debt.
- This generated profit and sparked his interest in leveraged buyouts.
Go4 Electrical Loss
- Chandra and Colin's first electrical contracting business, Go4 Electrical, resulted in a $300,000 loss in the first year.
- They liquidated personal assets to cover payroll due to unexpected working capital requirements and slow payment terms.
Working Capital Analysis
- When analyzing businesses with working capital needs, go beyond basic calculations.
- Carefully examine the nature of ongoing projects and payment terms, especially in construction.